A Look Inside the Fed’s Balance Sheet — 11/18/09 Update

The Fed’s balance sheet expanded in the latest week, rising to $2.192 trillion from $2.112 trillion. The bulk of the increase came from more than $71 billion in new purchases of mortgage-backed securities. The Fed also expanded its purchases of Treasurys and agency debt. The central bank started a program in March to ramp up such acquisitions in order to keep long-term interest rates low. The makeup of the balance sheet continues to shift as most emergency facilities to prop up the financial system posted declines. Direct-bank lending increased by about $58 million, but that followed a more than $30 billion decline in the previous week.

In an effort to track the Fed’s actions, Real Time Economics has created an interactive graphic that will mark the expansion of the central bank’s balance sheet. The chart will be updated as often as possible with the latest data released by the Fed.

In an effort to simplify the composition of the balance sheet, some elements have been consolidated. Portfolios holding assets from the Bear Stearns and AIG rescues have been put into one category, as have facilities aimed at supporting commercial paper and money markets. The direct bank lending group includes term auction credit, as well as loans extended through the discount window and similar programs.

Central bank liquidity swaps refer to Fed programs with foreign central banks that allow the institutions to lend out foreign currency to their local banks. Repurchase agreements are short-term temporary purchases of securities from banks, which are looking for liquidity and agree to repurchase them on a specified date at a specified price.

Click and drag your mouse to zoom in on the chart. Clicking the check mark on categories can add or remove elements from the balance sheet.

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